A pay cut

A pay cut.  A lot has been said about the way Covid has changed our lives, how we live, how we work, how we socialise, how we get educated. In one way or another, there’s not one aspect of our life that hasn’t changed by this pandemic. Working from home has probably been the one that stands out for most. Before Covid, working from home was almost like a tabu, some companies allowed it for a few days, others didn’t believe it would work. Covid came, and it became a reality for everyone. Recently, I heard some believe employers are now considering a pay cut to those who remain working from home, but does that even make sense?

A change of environment

Either you are the CEO of a big multinational, a small business owner or someone simply trying o make a living,  you will always look for more efficient and cost-effective ways to do things. That’s how we grow and, for entrepreneurs, that’s how our businesses grow.

This pandemic revolutionised the way we do business and it opened our minds to different approaches and different solutions. A different environment demands a different approach and different answers.

Before Covid, companies were spending thousands of dollars in one or two floors of an office in the city. That office needed to be furnished, equipped and supplied, so it would be possible to be used by the company’s staff. Covid came, and out of a sudden, the staff was gone and the expensive office was empty. However, the space was still there and so were the costs associated with it.

A change of mindset

This change of environment needs a change of mindset, and I believe that change is happening. Companies realised that having teams working from home is not as bad as they might have perceived it to be. The work is done and it may be a cost-effective way of running their businesses. Some may let go of some office space and allow their teams to work from home, even after we establish a “covid normal” environment. The savings made can be reinvested in new technologies or products. It seems to be a positive to take from such a negative event. Entrepreneurs need to be creative to read this environment and interpreter it well, so they are ready to make the change. There are savings to be made, there may be new opportunities and they need to be ready to face them and move forward.

Same service

But, the savings do not include wages. After all, the teams are still working, and some are even working more hours, now they don’t need to commute. The services they provide are still the same, so there are no grounds to think they should get a pay cut. And the idea that, because they don’t need to commute, they got less expenses and, therefore, they should be paid less is, in my view, ridiculous. We pay for the service provided, not the place where it is carried out or the personal expenses the service provider may or may not have. Even the argument that employees may have less expenses is not entirely true.

Employees may not have transport costs because they are not going into the office, they may not need to buy take-away food because they can eat at home, but they will need to pay for a great internet connection, to be able to carry out their work, they will need to pay for electricity to power the devices they use, the water, etc. In other words, some costs were transferred to the employee. So, if we analyse this argument we will see it makes no sense.

I believe this could be a positive change for both sides, I believe there are savings to be made on both sides and a better quality of life for all. However, I don’t think that means a pay-cut.